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20121129
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. >> reporter: eric smith heads the america's division of swiss re. >> reinsurance is about all forms of risk, whether its health, or life, or your home, or your property, the math behind it works the most effectively if you can spread the risk around the globe in all sorts of different forms. >> reporter: insurance companies buy their own insurance-- reinsurance-- from huge firms like swiss re which, because of their size, can afford the fullest data, plug in into the most sophisticated risk models. and doing just that, swiss re actually warned us of an east coast storm like sandy in 2006. after hurricane katrina, swiss re's head of catastrophe perils, andy castaldi, worried aloud about warming seas and more violent storms in the gulf. but, he told me: >> i'm also concerned about the new york bay and long island would be inundated by a flood, due to a category 3 storm. a storm surge could completely flood the airport at jfk. 13 feet of sea water is not out of or to 17 feet is not out of the question. >> reporter: so the blue is sandy's storm surge. we interviewed castaldi again last week, af
? that's what i asked jeffrey applegate. he's chief investment officer of morgan stanley smith barney. >> you need to respect more volatility, further volatility and possibly more volatility in equity markets because the fiscal cliff issue won't get resolved any time soon. our congress is in session for only about a week-and-a-half. it's probably going to take all that time for the president and the congress to agree on a deal on the fiscal cliff which we think they will because if they don't, then you have the potential of slipping into recession which is bad for a politician. >> susie: but if there isn't a deal how are investors going to respond? do you think they're just going to stay on the side lines and wait and see? >> well, if there is not a deal then play the movie forward. you get a sharp sell-off in equity. that forces politicians to then come back to the table and to conclude a deal. that's not the way you want to end there. you would rather end a different way. one way or another you end up with a resolution on the fiscal cliff which means the u.s. economy does not dip in
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